- Loss of earnings {LOE} (employability)
- Earnings basis (dependent contractor)
- Earnings basis (income splitting)
A dependent contractor suffered a shoulder injury in September 2001, for which he was granted a 10% NEL award. The worker appealed a decision of the Appeals Resolution Officer regarding the earnings basis for calculation of long-term benefits and regarding LOE benefits from May 2002 until the worker reached age 65 in 2010.
The Board correctly based long-term benefits on net business income plus add-backs. The worker submitted that there should be addition add-back of a business expense of $20,000, which the worker paid to his spouse. The worker submitted that this was an income splitting arrangement. The Vice-Chair concluded that it was not appropriate to add back the $20,000 in the circumstances. The amount was paid to the worker's spouse. The amount was listed in the worker's tax return salaries and wages. The Vice-Chair was satisfied that the spouse had at least some minor role in the business and that there was an intention to pay her for that role. The Vice-Chair also noted that wages were not one of the items explicitly identified in Board policy for adding back. This was consistent with Tribunal decisions that salary paid out as an income splitting arrangement is not added back to the net business income calculation.On the evidence, the worker was unemployable and entitled to full LOE benefits after March 2002.The appeal was allowed in part.